PenCom queries bill on paramilitary pension scheme


Zenith Bank

The National Pension Commission (PenCom) has kicked against the bill seeking to exclude paramilitary organisations including the police from the Contributory Pension Scheme (CPS).

The Acting Director-General of PenCom, Mrs Aisha Dahir-Umar, said in Abeokuta that the exclusion of the paramilitary organisations from the national pension scheme would not augur well for the officers and men of the outfits.

She spoke at the 2017 Annual Retreat organised by Pension Operators (PenOp) comprising 21 Pension Funds Administrators (PFAs) and four Pension Custodians.

The News Agency of Nigeria (NAN) reports that a bill seeking to amend the Pension Reform Act, 2014 to exclude members of the Nigeria Police, the Nigerian Security and Civil Defence Corps and Nigeria Customs Service (NSCDC) from the Contributory Pension Scheme had on May 16 passed the seconding reading on the floor of the House of Representatives.

The bill, sponsored by Mr Oluwole Oke, is also seeking to exempt the Nigerian Prison Service (NPS), Nigerian Immigration Service (NIS) and the Economic and Financial Crimes Commission (EFCC) from the scheme.

Dahir-Umar said their exemption would impact negatively on the country’s economy.

“The attention of the commission has been drawn to a bill currently before the House of Representatives seeking to amend the Pension Reform Act of 2014 .

“Despite the position of the Federal Government that further exemption of its agencies from CPS should be stopped, the House continued.

“The bill have dire consequences not only on the pension reform, but on the other reforms of governments,” said the acting DG, who was represented by Mr Aminu Farouk, the Head of Research and Management in the commission.

“The Nigerian Pension Industry through PenOp and PenCom remains the model in African countries such as Malawi, Tanzania, Ghana and Uganda that still come to understudy us.

“The Federal government further issued a white paper saying it will be unable to sustain pension payments under defined benefits pension schemes and directed that only the military intelligence and the state security services may withdraw from the contributory scheme,” Dahir-Umar said in her contributions to a position paper on the bill.

She said the Federal Government was already overburdened with the payment of pensions as reflected in the 2016 Appropriation Act.

According to her, about N200 billion was appropriated in the Act as pensions and gratuities which is still insufficient to fund pension liabilities of government.

The acting PenCom DG said:“For instance, the 2016 Pension Transitional Arrangement Directorate’s (PTAD) total budget proposal indicated a total annual pension liability of the sum of N388.3 billion.

“Out of the amount, the sum of N255.8 billion constituted unfunded liabilities which was inherited by PTAD mostly due to outstanding payments for 33 per cent arrears to pensioners under the Defined Benefits Scheme.

“PTAD had indicated that there had been no provision for unfunded liabilities in the past which now forms part of its core obligations.’’

Dahir-Umar, however, noted that the Nigeria Police pension scheme had recorded some progress.

“It is note worthy that the NPF pension scheme as at 2017 has already registered 155,823 members with a total monthly contribution of N 238. 25 billion and total assets of N283. 90 billion.”

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